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You Make the Call !

Back in the late '80s and early '90s IBM and others sponsored ads in NFL games called 'You Make the Call'. The idea was to show you a clip from a controversial play, and then the announcer would demand 'You Make the Call'. After that came the ad, then a recap and the 'right' answer to whatever the infraction was. They no longer run those ads in NFL games, but some ideas never die.

Part of an ERISA fiduciary's responsibility is to determine if the fees paid for services rendered to a plan are 'reasonable'. We recently looked at two 401(k) retirement plans each having about $16.5 million in assets, although the participant counts were different - about 130 participants in one plan, and 400 in the other. Each of the plan sponsors thought they were paying 'reasonable' fees, but as we found out in the course of our study, the fees each plan paid were significantly different.

Fee Disclosures - What To Do Next

Retirement Plan Sponsors may be heaving a sigh of relief now that they have received fee disclosures from their vendors and plan participants are starting to get the participant level fee disclosures. However, it may be too early to relax. Now that Sponsors have all this information about fee disclosures and are presumably educated about ‘Revenue Sharing' from mutual funds, there may be an additional step they need to think about. First, did all vendors who were supposed to provide a disclosure actually do so, and do those disclosures contain sufficient detail? Second, are the plan expenses and revenue sharing payments from mutual funds allocated fairly among all plan participants?

Fiduciary's Lament: Our retirement plan is free, how can I be paying too much?

Everybody likes to get a good deal, or at least think they are getting a good deal, right? It follows that if your retirement plan is 'free', then you are getting a good deal, right?
Wrong! Just ask the folks at the big power and engineering company ABB Group. In a recent court decision, the Company was fined over $35 million for, in part, failing to perform their fiduciary duty and monitor the fees paid by the plan. Fidelity Investments was also required to pay $1.7M to the plan.
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